spot_imgspot_imgspot_img

Why Did BTC Price Drop After Approval of Spot Bitcoin ETFs? Here’s the Reason!

  • Bitcoin price is losing momentum after the approval and listing of spot Bitcoin ETFs, experiencing a drop from $48,969 to $40,297.
  • Grayscale Bitcoin Trust (GBTC) sold approximately 60,000 Bitcoins, but other 10 spot Bitcoin ETFs operated by BlackRock, Fidelity, Bitwise, among others, collectively bought around 72,000 Bitcoins.
  • The Bitcoin sell-off came from holders, including short-term traders and whales, who took advantage of the ‘sell the news’ activity to cash in on the recent rally.

After Spot Bitcoin ETFs received approval from the SEC, the BTC price fell: What are the reasons for this decline?

BTC Price Drops After Approval of ETFs

bitcoin-btc

Bitcoin price is losing momentum after the approval and listing of spot Bitcoin ETFs, experiencing a drop from $48,969 to $40,297. Moreover, there is a significant decrease in trading volume on crypto exchanges. Additionally, there is a story circulating about Grayscale Bitcoin Trust (GBTC) selling Bitcoin assets, but the CryptoQuant team claims that this is not the case and anticipates a short-term correction.

Julio Moreno, the head of research at CryptoQuant, stated that the current Bitcoin price correction is not caused by GBTC selling Bitcoin assets, and there is a false narrative circulating in the market. Grayscale Bitcoin Trust (GBTC) sold approximately 60,000 Bitcoins, but other 10 spot Bitcoin ETFs operated by BlackRock, Fidelity, Bitwise, among others, collectively bought around 72,000 Bitcoins. This shows that the inflow has indeed increased, and the trading volume is surpassing billions.

The Bitcoin sell-off came from holders, including short-term traders and whales, who took advantage of the ‘sell the news’ activity to cash in on the recent rally. According to CryptoQuant’s views, “Several On-Chain metrics and indicators still show that the price correction may not have ended or at least a new rally is still possible. Short-term traders and large Bitcoin holders continue to sell significantly in a risk-averse stance. Also, unrealized profit margins haven’t dropped to a level that could be said sellers are exhausted.”

Renowned analyst CredibleCrypto mentioned that the net positive ETF flows were +5,000 Bitcoin purchases, which is 10 times the impact of the halving effect. However, the recent price action does not seem to reflect this. This definitely proves that there are other more significant factors at play with a larger impact on short/medium-term price action.

Short-Term Correction Expected for BTC Price

Ki Young Ju, the founder and CEO of CryptoQuant, stated in a post on January 20 that Bitcoin is not entirely distributed to retail investors in the distribution phase. He points out a short-term correction in BTC price after the recent 15% drop in the last few days. However, he added that the long-term bull market cycle will continue until Bitcoin is entirely distributed to retail investors. The long-term outlook remains positive.

The BTC price is currently trading at $41,740, showing a 0.15% increase in the last 24 hours. The 24-hour low and high values are $40,297 and $42,134, respectively. Also, the trading volume has decreased by 16% in the last 24 hours, indicating reduced interest among traders.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news

spot_imgspot_imgspot_imgspot_img

Latest News

Bitcoin and Altcoin Investment Products Witness $5.7 Billion Inflow!

Bitcoin and cryptocurrency investment products recorded a massive influx of funds, with increasing demand for Spot Bitcoin ETFs leading the way!

MicroStrategy Acquires 3,000 Bitcoin: Latest Status of the Company’s Assets!

Michael Saylor announced that MicroStrategy company purchased Bitcoin. The company's total assets exceeded 190K BTC.

Historic $1.3 Billion Bitcoin Transaction Sparks Debate on Crypto Valuation

A recent colossal Bitcoin transaction has reignited discussions about Bitcoin's valuation, comparing historical trades and pondering the future of currencies in the digital age.

Ethereum Dencun Upgrade is Approaching: Which Layer 2 Tokens Stand Out?

With Ethereum's Dencun upgrade approaching, tokens of Layer-2 DeFi platforms on Ethereum have started to gain attention.

A Massive Transfer of XRP Tokens is Occurring: Will XRP Price be Suppressed?

Based on blockchain transactions, more than 400 million XRP tokens were moved today. Will XRP price drop further?
spot_imgspot_imgspot_imgspot_img

PRO Analysis

Ethereum Breaks $3K as Rally Continues: What’s Next for ETH?

This article dives into Ethereum's recent surge past $3,000, analyzing the technical indicators and market dynamics driving its ascent and future prospects.

Will Bitcoin Rise To $50,000? Current BTC Analysis

Bitcoin is trading at $48,400 and may rise to $50,777 if it closes above $48,200. However, caution is advised in the range of $50,777 - $52,000. Corrections are common in the crypto market, so careful consideration is necessary before spot investments.

Where is the Solana Rise Target? Current SOL Analysis!

Solana is trading near the $108 resistance on the 8-hour chart, with a potential target of $111.84 if it surpasses this level. However, caution is advised in the $111.84 - $117.20 resistance range on the 6-hour timeframe.

Medium Term Ethereum Technical Analysis! What Awaits Its Investors?

When examining the medium-term technical chart of Ethereum, strong buying pressure is observed, pushing the price up from the $2139 support to the $2350 region. However, for the price to sustain its upward movement, it needs to surpass the $2407 resistance.

Can Bitcoin Fall To $35,000 Levels? Current BTC Analysis

When examining Bitcoin's 5-day technical chart, the analysis from January 18 is ongoing, indicating a continued downward movement from the $48,189 level. Bitcoin needs to close 5-day candles above the $44,200 resistance to gain momentum for an upward trend. 
Celal Mutlu
Celal Mutluhttps://coinotag.com/
Celal Mutlu is a young Satoshi reflection at the age of 21. His favorite characters are CZ and Vitalik, and he has a great sense of humor. Celal is a keen follower of developments in the world of cryptocurrency and keeps up with the latest news and trends.
spot_imgspot_imgspot_imgspot_img

Bitcoin and Altcoin Investment Products Witness $5.7 Billion Inflow!

Bitcoin and cryptocurrency investment products recorded a massive influx of funds, with increasing demand for Spot Bitcoin ETFs leading the way!

MicroStrategy Acquires 3,000 Bitcoin: Latest Status of the Company’s Assets!

Michael Saylor announced that MicroStrategy company purchased Bitcoin. The company's total assets exceeded 190K BTC.

Historic $1.3 Billion Bitcoin Transaction Sparks Debate on Crypto Valuation

A recent colossal Bitcoin transaction has reignited discussions about Bitcoin's valuation, comparing historical trades and pondering the future of currencies in the digital age.